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Sunday, February 24, 2008

Market Forces

My theory is that if a building has too many apartments for sale at any one time, this negatively impacts the value of the apartments. First, it shows high turnover (which could mean dissatisfaction. Second, it drives the price down -- as purchasers can play each seller off. On the other hand, scarcity drives values higher.

I have tried to work out how many apartments are for sale in certain buildings as at today, looking at various sources, and this what I conclude. I did not count anything reported to be under contract. The details are probably inaccurate, but the overall picture is probably about right:

Brisbane City

Admiralty Towers One - 0

Admiralty Quays - 1

Admiralty Towers Two - 2

Quay West - 2

Metro 21 - 4

River Place - 5

Felix - 6

Casino Towers - 8

Skyline - at least 26 (plus what the developer has not yet sold)

Festival Towers - 32

Charlotte Towers - at least 40 (plus what the developer has not yet sold)

Aurora - 41

M on Mary - more than 100

South Bank area

Saville South Bank - 0

Arbour on Grey - 2

A Niche Realty Newsletter reports the following regarding number of sales and median sales price over a six month period (1 May 2007 to 30 October 2007):

Aurora: 29 sales, medium sales price of $470,000

Casino Towers: 26 sales, medium sales price of $477,500

Felix: 13 sales, medium sales price of $440,000

Riverplace: 7 sales, medium sales price of $600,000

Admiralty Towers 2: 7 sales, medium sales price of $700,000

212 Margaret: 7 sales, medium sales price of $322,000

Admiralty Towers: 4 sales, medium sales price of $755,000

Quay West: 4 sales, medium sales price of $445,000

By comparison, in the whole of Indooroopilly, there are 12 apartments/units currently listed for sale, of varying age and quality.